Polaris Industries Inc. today reported
record first quarter net income from continuing operations of $0.42 per
diluted share for the quarter ended March 31, 2005, an 11 percent increase
over the prior year first quarter net income from continuing operations of
$0.38 per diluted share. Higher sales volume compared to last year's first
quarter along with lower operating expenses, as a percent of sales,
contributed to the first quarter 2005 earnings increase. Reported net
income from continuing operations for the first quarter 2005 was a record
$19.1 million, a 12 percent increase over the prior year first quarter net
income from continuing operations of $17.1 million. Sales from continuing
operations for the first quarter 2005 totaled a record $358.3 million, up
nine percent from last year's first quarter sales from continuing
operations of $329.0 million.

"Despite a difficult external
environment and higher commodity costs during the first quarter, we were
able to show improved earnings for the 28th consecutive quarter," commented
Mr. Tom Tiller, Chief Executive Officer of Polaris. "Although we expect
this year will be challenging, we remain confident in our ability to manage
through these external uncertainties as we have in the past and achieve
another record year of sales and earnings for the Company."

Discontinued operations results

The Company ceased manufacturing
marine products on September 2, 2004. As a result, the marine products
division's financial results are being reported separately as discontinued
operations for all periods presented. The Company's first quarter 2005 loss
from discontinued operations was $0.3 million, net of tax, or less than
$0.01 per diluted share, compared to a loss of $2.8 million, net of tax, or
$0.06 per diluted share in the first quarter 2004. Reported net income for
the first quarter 2005, including both continuing and discontinued
operations, was $18.8 million, or $0.42 per diluted share compared to $14.3
million, or $0.32 per diluted share in the first quarter of 2004.

ATV (all-terrain vehicle) sales in the first quarter 2005 increased
12 percent over the first quarter 2004. Continued strong growth in the
RANGER(TM) product line, increasing demand for the new Sportsman 800 EFI
(electronic fuel injection) ATV and the new value priced Phoenix ATV, and
continued strong international sales growth were the primary contributors
to the ATV sales growth for the first quarter 2005. In addition, the
average sales price per unit for ATVs increased six percent in the first
quarter 2005 compared to the first quarter 2004 as a result of the higher
RANGER(TM) shipments and a positive product mix change.

Sales of
Victory motorcycles increased 12 percent during the first quarter 2005
compared to the first quarter 2004. The increase is attributable to ongoing
positive brand recognition, consumer acceptance of the new Victory
motorcycles including the Vegas, Kingpin and the all new Hammer model which
began shipping in March 2005 and an improved dealer network.

Parts,
Garments, and Accessories sales increased 8 percent during the first
quarter 2005 compared to last year's first quarter. The PG&A business was
positively impacted primarily by stronger sales for ATV parts and accessory
sales. Specifically, the new Lock and Ride accessories for ATV and
RANGER(TM) have been well received by Polaris ATV buyers for their
versatility and ease of installation.

Snowmobile sales decreased to
$7.2 million for the first quarter 2005 compared to the prior year's first
quarter sales of $13.3 million. Last year sales in the first quarter were
higher than normal due to increased late season dealer demand resulting
from better snowfall in January through March of 2004. Snowfall in the
first quarter of 2005 was below normal across many of the regions in the
snowbelt of North America, causing dealer inventories of snowmobiles to be
at higher levels at the end of the riding season compared to last years
levels.

Gross profit increased nine percent to $84.5 million for
the first quarter of 2005 compared to $77.5 million for the first quarter
of 2004. Gross profit, as a percentage of sales, was 23.6 percent for the
first quarter 2005, flat with the first quarter of 2004. The gross profit
margin continued to benefit from production efficiency gains and ongoing
cost reduction efforts, as well as a net positive impact of currency
fluctuations during the quarter. However, these improvements, in aggregate,
were offset by increased raw material costs, primarily for steel and other
commodities, and higher transportation and fuel costs incurred in the first
quarter of 2005 when compared to the first quarter 2004.

For the
first quarter 2005, operating expenses increased eight percent to $63.7
million compared to $59.2 million for the first quarter 2004. As a percent
of sales, operating expenses improved to 17.8 percent, a decrease from 18.0
percent in the first quarter. Lower sales and marketing expenses in the
first quarter 2005 were offset by a 23 percent increase in research and
development expenditures as Polaris continues with initiatives to
accelerate the design and introduction of new products. The Company's new
research, testing and technology center in Wyoming, Minnesota is on
schedule to open in the second quarter 2005.

Income from financial
services increased five percent to $8.5 million in the first quarter 2005,
up from $8.1 million in the first quarter 2004 primarily a result of the
increased profitability generated from the wholesale receivable portfolio
of Polaris Acceptance.

Financial position and cash flow

Polaris historically experiences the highest demand for cash during the
first quarter of each year. Net cash used for operating activities of
continuing operations totaled $58.7 million for the first quarter ended
March 31, 2005 compared to $24.3 million used in the first quarter of 2004.
An increase in inventories at March 31, 2005 compared to the prior year
first quarter was the primary reason for the increased use of net cash from
operating activities of continuing operations during the first quarter of
2005. The Company's debt to total capital ratio declined to five percent at
March 31, 2005 compared to seven percent a year ago.

Share buyback
continues

During the first quarter 2005 the Company repurchased and
retired 304,000 shares of its common stock at a cost of $21.5 million.
Since inception of the share repurchase program in 1996, 20.3 million
shares have been repurchased at an average price of $23.18 per share. Under
the Board of Directors' current authorization, approximately 2.7 million
shares of Polaris stock are available for repurchase.

2005 Business
Outlook

For the full year 2005, Polaris' previously issued earnings
per share from continuing operations guidance remains unchanged and is
expected to be in the range of $3.28 to $3.42 per diluted share, an eight
percent to thirteen percent increase over the full year 2004 results of
$3.04 diluted per share. Sales growth guidance for the full year 2005 also
remains unchanged and is expected to be in the range of seven percent to
ten percent compared to 2004.

"I remain confident that we can
achieve another record year in sales and earnings in 2005, marking our 24th
consecutive year of record earnings," stated Mr. Tiller. "There are
challenges that lie ahead of us including ongoing pressure from increasing
product costs, particularly steel and transportation and the continued lack
of good snowfall which is negatively impacting our snowmobile business.
However, we have a plan to mitigate these challenges as the year
progresses. We are confident that we will continue to experience strong
growth in our RANGER(TM) utility vehicles and our international business.
Additionally, our motorcycle business continues to show improvement across
the board, particularly in brand awareness, product quality and its dealer
network." Tiller continued, "As always we will rely upon our greatest
asset, our people, to overcome the challenges and continue to capitalize on
the opportunities we see for the Company."

About Polaris

Information about the
complete line of Polaris products is available from authorized Polaris
dealers or from the Polaris homepage at www.polarisindustries.com.

Polaris is the recognized leader in the snowmobile industry and one
of the largest manufacturers of ATVs in the world. Victory motorcycles,
established in 1998 and representing the first all-new American-made
motorcycle from a major company in nearly 60 years, are rapidly making
impressive in-roads into the motorcycle cruiser marketplace. Polaris also
enhances the riding experience with a complete line of Pure Polaris
apparel, accessories and parts, available at Polaris dealerships. Consumers
can also purchase apparel and vehicle accessories anytime at
www.polarisindustries.com.

Polaris Industries Inc. trades on the
New York Stock Exchange and Pacific Stock Exchange under the symbol "PII,"
and the Company is included in the S&P Small-Cap 600 stock price index.